The owner of one of Hong Kong’s leading beauty parlour chains claims that she is HK$60 million out of pocket after one customer got more than facial treatments out of their relationshipMore in comments...

China Vanke has rejected demands for refunds or compensation by customers who bought properties before it cut prices in late August, in a move analysts said could make potential buyers even more wary of the cooling real estate market.More in comments...

Mainland lenders will see a gradual increase in bad loans taken out by property developers and troubled export-oriented manufacturers amid a global economic slowdown, says Standard & Poor’s.More in comments...

The local fund management industry has limped through this year as investors lose appetite for their products amid staggering market volatility, according to a report released yesterday by the Hong Kong Investment Funds Association.

Many Chinese have lost huge amount of money in mutual funds; now it's very difficult to raise new funds including QDII funds. Singapore will not see QDII funds buying our S-shares for a while.More in comments...

Why anyone would choose to work in China’s often deadly mining industry must surely be a mystery until you talk to people like Lu Renyan. For him, poverty is the motivating factor, given the potential financial rewards.More in comments...

Foreign institutions bought heavily into mainland-listed stocks last month, a fresh sign that overseas investors are hunting bargains as two-thirds of the market’s capitalisation have evaporatedGo to my new blog Market News at top right corner.

This review features three investability weight (IW) changes. There are upgrades in the IWs of Singapore Telecom, to 50% from 40%, and Genting, to 40% from 30%. Wilmar, by contrast, has its IW downgraded to 20% from 40%, resulting in a circa 2.4% weighting cut.View PDF

The new changes only make the STI more skewed towards the Jardine group of companies. Now with the thinly traded JSH, Jardine C&C and JMH included, it will be easier to manipulate the STI by the hidden hands.

One observation: FTSTI is managed by the English, Jardine Group is also managed by the English. And let's not forget the opium trade was managed by the English.

However, do observe that the 10-day Rate of Change (ROC) of the index on the daily chart has not yet reached its support. The index is inclined to decline further before any short-lived rebound.

On the positive front, the index could see a potential corrective rally set up at the 19,351-19,387 area. 19,387 was the prior low on the daily chart while 19,351 is 0.618x swing target on the weekly chart.

We expect any corrective rally to be contained by the downtrend resistance near 20,800. Our stance is SELL into rallies...View PDF

With its unprecedented takeover of Fannie Mae and Freddie Mac this week, the U.S. government may have also bailed out Asia’s markets by stanching a heavy flow of equity capital out of the region.View PDF

Despite the GSE package announced by the U.S. authorities over the weekend, emerging market share prices have remained under siege. There are two undercurrents driving the accelerating sell-off: massive liquidation by long-term investors; and concerns about the next casualty in the U.S. financial system (like the Lehman Brothers, whose stock price is collapsing amid speculation the firm could be heading into bankruptcy).

Tuesday, 9 September 2008

With China making new ytd lows and the Beijing Olympics having concluded, we examine the case to turn more positive.

Not yet, according to Goldman Sachs. At the macro level, growth and inflation are not yet low enough to warrant a shift to a stimulative policy bias. On the micro level, we anticipate further declines to consensus earnings forecasts. Neither issue is fully discounted by the market, in our view.

This month, China’s leading real estate developers will bring to market a fresh supply of new housing. In previous years, this would find home buyers out in force, snapping up properties no matter what the price. But this year it will come as a severe test as the housing market continues to decline and sales of new homes have become extremely difficult.

There’s no denying that the initial public offer (IPO) market is in pretty bad shape - about 90 per cent of IPOs this year are below their offer prices and anyone brave enough to list now is almost guaranteed to see their shares trade at a first-day discount.

Based on the price-to-earnings ratio, U.S. stocks have actually become more expensive even as share prices have come tumbling down. In fact, the P/E ratio for the Standard & Poor’s 500-stock index, based on earnings over the previous four quarters, has risen to just over 24 from around 19, according to S&P.

Sunday, 7 September 2008

Anyone who thinks China has successfully escaped the sort of property market and banking sector crisis that has hit the United States and Britain over the past year might like to think again. The signals get more ominous all the time.